Friday, July 22, 2011

Sarkozy involved in offering bribes to Saudi official for Airbus deal

Sarkozy's involvement with the Saudi bribery scandal mirrors similar allegations of receiving kickbacks in return for French defense contracts with Taiwan and Pakistan.

By Wayne Madsen

In what may prove to be an old scandal but one that could come back to further tarnish his already poor image, French President Nicolas Sarkozy has been heavily implicated in a bribery scandal from the 1990s involving an Airbus deal to supply Saudia Airlines with commercial passenger planes.

The French government, then led by Prime Minister Edouard Balladur, a political mentor of Sarkozy offered to pay a bribe to a major Saudi official in return for a $6 billion contract with the Saudi Ministry of Defense and Aviation (MODA) to re-supply Saudia with aircraft. WMR has learned from a source involved with the Saudi contract negotiations that Sarkozy, France's Budget Minister at the time, was Balladur's "right-hand man" in offering the bribe to the Saudi official, said to be a high-level prince in the Saudi government.

Balladur traveled to Saudi Arabia in January 1994 to personally lobby King Fahd for the contract with Airbus. However, President George H. W. Bush had sealed a deal with the Saudis in 1992 for McDonnell-Douglas to supply 72 F-15 fighter jets to the Saudis in a $4 billion deal, with $600 million to Pratt and Whitney for jet engines and an additional $1 billion in "commissions" paid to the same top Saudi prince through a MODA account maintained at Riggs Bank. George H. W. Bush's brother Jonathan Bush became the President of Riggs Investment after the bank bought his J. Bush & Co. in 1997.

In the McDonnell-Douglas "deal" with the Saudis, a package that totaled $5.6 billion, Bush believed he could deliver his promise of election year jobs to the people of St. Louis, where the planes would be built. Bush made the promise to McDonnell-Douglas workers and their families in a speech at Lambert Field on September 11, 1992. Missouri was a key battleground state between Bush and Bill Clinton. In the end, the bribe paid to the Saudi prince, a noted friend of the Bush family, had no impact on Missouri. Clinton won the state's 11 electoral votes.

In detailed information provided to WMR by an aviation industry top executive who was involved with the sensitive negotiations, we learned that the original jet fighter deal worked out between Bush and King Fahd had an additional sweetener: the Saudia commercial plane deal was to go to Boeing to the tune of $4 billion for Boeing, $1.2 billion for General Electric engines, $420 million for Pratt and Whitney/International Aero Engines (IAE) engines, $1.6 billion for McDonnell-Douglas to help it keep it from curtailing production at its Long Beach, California commercial aircraft plant. The total contract was worth $7.2 billion. In addition, our source reports that a "commission" (bribe) equaling $250 million, was paid to Saudi banker Khalid bin Mahfouz, the brother-in-law of Osama bin Laden and the owner of the National Commercial Bank of Saudi Arabia. Bin Mahfouz, who died of a sudden heart attack in 2009, threatened to sue major publications who reported that he was the brother-in-law of Bin Laden, even after CIA director testified in 1998 that Bin Mahfouz was Bin Laden's brother-in-law. Woolsey and major publications, including the Washington Post and Wall Street Journal, later retracted the report on the brother-in-law link between the two Saudis.

In 1995, when the Saudia airline contract was being considered, Balladur had no way of knowing that the Clinton administration had been apprised of the Boeing deal with the Saudis and that the U.S. National Security Agency (NSA) had intercepted communications between Balladur and his Budget Minister Sarkozy offering the Saudis bribes in return for Saudia awarding its contract for new planes to Airbus. In the end, the Saudis nixed the deal with Balladur and Sarkozy. Sarkozy's involvement with the Saudi bribery scandal mirrors similar allegations of receiving kickbacks in return for French defense contracts with Taiwan and Pakistan.

However, WMR has learned that the French bribery involvement with the Saudis pales in comparison with bribes and kickbacks involving top Saudis and U.S. politicians, particularly George H. W. and George W. Bush. WMR has learned that violations of the Foreign Corrupt Practices Act by U.S. corporations in deals with the Saudis have totaled $350 billion. $83 billion from U.S. bribes have been placed in special Saudi fund devoted to squelching civil dissent in Saudi Arabia. The CIA is fully supportive of the "arrangement."